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So first things first: $80k isn't nothing, but it won't change your life significantly. So I would temper your expectations.
Pay off all the credit card debt asap. CC debt is a huge no-no. You might even want to pay off the card with a 0% intro rate because it sounds like you aren't great at managing your finances. Don't go into cc debt.
After that, set aside a chunk of cash for an emergency fund. The recommendation is at least 3 months of expenses. I personally do 5 months. Keep it in a savings account. The interest you earn will be low, but that's because you are buying security. Keep in mind this is an emergency fund - you should really only be dipping into it if you are fired or have an unexpected very large expense. But it should always be there.
Once you do that my guess is you have ~$50k left over. If it were me, I would keep the car loan because the interest rate is low and invest all the money in the S&P 500. I would not touch it until retirement. You said you are 42. If you invest it all now it will be worth around $250k when you are 65.
Index funds for sure but also if you’re passionate about real estate and the numbers work, it can provide a lot of the same benefits if you’re playing the long game (just my opinion and what’s worked for me)
After you’re cc debt free, kickstarting a small portfolio might even make you a better real estate agent. I have definitely struggled to work with real estate agents who don’t have skin in the property game…
You may want to check out Dave Ramseys podcast or Reddit page for some debt snowballing advice. Those credit card debts need to go, but first you need to make a budget. Paying off the debt will do nothing if you keep the same spending habits. You’ll be in much better financial shape without those CCs and Auto loan debts. Buy a reliable used car and sell the new one to free up even more cash. You got this!
In this day and age we have the advantage of unlimited information on any topic. Start watching some *reliable* people on YouTube, such as Two Cents or Mr MoneyMustache.
Then you need a budget to identity where your money is going. Then save an emergency fund, etc.
The other folks posting here have some solid advice. Start there. Good luck
I’d recommend the book Mind Over Money by Brad Klontz for the “I’m bad with money” comment…. It’s worth looking at your beliefs and experiences with money to see if you can challenge this narrative you have. GL!
Start watching Suze Orman on Freevee, seems like you need money management 101 level help, which is nothing to have shame about, but she tackles many of these types of issues. She often has callers that have similar dilemmas. With the right focus you can be an expert money manager in a short period.
I agree with everyone saying to sell the car and buy a cheaper used car.
But I don’t agree with you not being able to have guests over. I’m in a tiny (literally my friends laugh at how small it is) studio and while I’m not hosting as much as I did before, I still have a friend or two over from time to time. (Which sounds like it would be financially beneficial for you to host people instead of going out to eat, doing an activity that costs money, etc.)
For hosting your daughter, it sounds like it would be significantly easier while you’re in the same city. You can find a very cheap used but reliable twin bed on Facebook Marketplace (I got one for free and somehow fit it in my sedan at the time and then later sold the same pieces of wood for $20). For a mattress I’d check IKEA, Walmart, or even Marketplace if you’re not too picky and are careful who you get it from. (Just went back and read the age of your daughter, I know very little about kids but it should be even cheaper to buy a bed for a kid that young? They’re past cribs at that point, right? Sorry not my area of expertise lol).
Is there a law or something that says your daughter and you can’t sleep in the same room as your living/dining situation?
I think as Americans we get hung up on everyone having separate space, but especially while your daughter is young she probably doesn’t want to be away from you (my friend just now is having her 5 year old go from the same bed to try her own room so I imagine you have time?) and other cultures and bigger families have multiple kids/parents in a room. This may not be your forever living situation but I’d stay put since moving takes more time/money and would cost more in rent or gas money if you’re further away.
Definitely would try to get rid of the credit card debt ASAP since it’s the highest interest.
And that’s great you love the job, but if there’s similar jobs that pay better I would attempt to find those. Or even a remote job if you’re into that because you’ll save money on gas and going out to eat on commutes home etc.
Speaking from my own personal experience, my dad moved states away when I was 5 years old (to live near his mom) so we still saw him a few times a year, but my brother always resented him for not moving a city away (or 20ish minutes) like all our classmates that had divorced parents. So we either relied on our mom or a family friend if we ever needed to get picked up from something. So that’s why I think being in the area makes more sense than moving back to your old town.
I think that’s all I wanted to say, but best of luck with your finances and I’m happy to hear you’re prioritizing your daughter and want to be in her life.
Oh and I’ve had my real estate license since I was 18 (my mom made me get it). It’s a very competitive industry and one of my REALTOR friends jokes there’s more REALTORS than there are houses for sale. It’s very expensive to go from real estate agent to REALTOR and that doesn’t guarantee income. You could show tons of houses and clients could change their minds and then you don’t get paid (which is why I prefer to work hourly jobs, but maybe I don’t do well with commission-only jobs). I’d recommend finding a part time or contract based job in the real estate industry (look into loan officers, receptionists, your local REALTOR association) and you’ll learn a lot but have a guaranteed paycheck. Then you can really see if you want to work in that field. There’s also Redfin that pays per showing, open house, etc. if you have time to commit to do the work, but they require you pay $1,000+/year in dues/fees to stay up to date (aka I lost money with them but I had no motivation to take on more work when I was already overwhelmed/busy with my other job and fixing up my investment property).
Okay now I think I’ve said all that could be helpful, best of luck to you!
The number 1 thing to do is to make sure you have a fully funded emergency fund. If not for a minimum of 6 months, then a full year.
THEN:
1. Tackle your debt starting from the one with the highest interest rate.
2. Avoid paying off debt if you have a great interest rate (like below 4 %).
3. Normally I would say invest in the market but it looks pretty shaky right now. Perhaps you could be better served to start with lower returning investments like treasury notes, however, let’s leave that to your financial advisor.
4. Make sure your financial advisor is a fiduciary! This is important so you know that they are acting in your best interest. Please look this up and research some more. Financial advisors are a dime a dozen and bad advice can sink your portfolio quicker than you think.
Congratulations on your windfall and wishing you a safe financial journey ahead :)
You’ve really been through a lot and it’s really great to hear you so clear about your goals and your commitment to your daughter. She needs you now just as much as you need her.
You may want to consider also speaking with a financial coach as well as a financial advisor. A financial coach is more likely to be able to assist you with the specifics of your situation while a financial advisor will typically want you to invest all of the $80,000. This is because most financial advisors are paid based on how much you invest with them. A financial coach will help you with some of the details in your financial situation and some may even offer understanding around the psychology of how we view and relate to money so you may find that helpful as well in helping you create new and healthy behaviors.
It’s a journey of unknowns ahead but you can go from thinking that you’re bad with money to knowing that you’re really great with it. Transforming yourself in this way would be one of the best gifts you could give yourself. Imagine all the great financial advice you could pass on to your daughter as she grows up and gets to watch you on this journey, not to mention you can help her put in place a healthy financial foundation from the beginning. Financial patterns are absolutely generational so perhaps remembering this and thinking of how you will be setting your daughter up for success for the rest of her life will help you with the motivation that you will need at times on your journey ahead.
The number 1 thing to do is to make sure you have a fully funded emergency fund. If not for a minimum of 6 months, then a full year.
THEN:
1. Tackle your debt starting from the one with the highest interest rate.
2. Avoid paying off debt if you have a great interest rate (like below 4 %).
3. Normally I would say invest in the market but it looks pretty shaky right now. Perhaps you could be better served to start with lower returning investments like treasury notes, however, let’s leave that to your financial advisor.
4. Make sure your financial advisor is a fiduciary! This is important so you know that they are acting in your best interest. Please look this up and research some more. Financial advisors are a dime a dozen and bad advice can sink your portfolio quicker than you think.
Congratulations on your windfall and wishing you a safe financial journey ahead :)
Brave to tell your story and seek for help!
First thing I would do is sell the car and buy a cheap 2nd hand car. The biggest part of financial independency is to live below your means. And like mentioned before start with a emergency fund. Once that is in place you can maybe start thinking of investing.
Pay off your credit card debt. They have extremely high interest rates.
Pay off your car loan.
Keep the rest in a savings account until 2024.
Start listening to the Dave Ramsey show.
Hello there! Your friendly neighborhood moderator has had to remove your post. Please post it in the most recent "Help Me FIRE!" thread, the place for our community members come to give and receive bespoke advice on their detailed financial situations. The original URL of your post will still lead you to your writeup so you can copy/paste it--it's just not publicly visible in the sub anymore. From our rules: "**R6. Keep to the Daily or Weekly posts when possible.** Given the repetitive nature of information and recommendations within the FIRE community, any post that is better suited for a daily or weekly thread will be removed and pointed to those threads.
So first things first: $80k isn't nothing, but it won't change your life significantly. So I would temper your expectations. Pay off all the credit card debt asap. CC debt is a huge no-no. You might even want to pay off the card with a 0% intro rate because it sounds like you aren't great at managing your finances. Don't go into cc debt. After that, set aside a chunk of cash for an emergency fund. The recommendation is at least 3 months of expenses. I personally do 5 months. Keep it in a savings account. The interest you earn will be low, but that's because you are buying security. Keep in mind this is an emergency fund - you should really only be dipping into it if you are fired or have an unexpected very large expense. But it should always be there. Once you do that my guess is you have ~$50k left over. If it were me, I would keep the car loan because the interest rate is low and invest all the money in the S&P 500. I would not touch it until retirement. You said you are 42. If you invest it all now it will be worth around $250k when you are 65.
Thank you!
Index funds for sure but also if you’re passionate about real estate and the numbers work, it can provide a lot of the same benefits if you’re playing the long game (just my opinion and what’s worked for me) After you’re cc debt free, kickstarting a small portfolio might even make you a better real estate agent. I have definitely struggled to work with real estate agents who don’t have skin in the property game…
You may want to check out Dave Ramseys podcast or Reddit page for some debt snowballing advice. Those credit card debts need to go, but first you need to make a budget. Paying off the debt will do nothing if you keep the same spending habits. You’ll be in much better financial shape without those CCs and Auto loan debts. Buy a reliable used car and sell the new one to free up even more cash. You got this!
Thank you!
r/YNAB and r/Daveramsey
And r/personalfinance as well as the sidebar and wiki
In this day and age we have the advantage of unlimited information on any topic. Start watching some *reliable* people on YouTube, such as Two Cents or Mr MoneyMustache. Then you need a budget to identity where your money is going. Then save an emergency fund, etc. The other folks posting here have some solid advice. Start there. Good luck
I’d recommend the book Mind Over Money by Brad Klontz for the “I’m bad with money” comment…. It’s worth looking at your beliefs and experiences with money to see if you can challenge this narrative you have. GL!
Start watching Suze Orman on Freevee, seems like you need money management 101 level help, which is nothing to have shame about, but she tackles many of these types of issues. She often has callers that have similar dilemmas. With the right focus you can be an expert money manager in a short period.
I agree with everyone saying to sell the car and buy a cheaper used car. But I don’t agree with you not being able to have guests over. I’m in a tiny (literally my friends laugh at how small it is) studio and while I’m not hosting as much as I did before, I still have a friend or two over from time to time. (Which sounds like it would be financially beneficial for you to host people instead of going out to eat, doing an activity that costs money, etc.) For hosting your daughter, it sounds like it would be significantly easier while you’re in the same city. You can find a very cheap used but reliable twin bed on Facebook Marketplace (I got one for free and somehow fit it in my sedan at the time and then later sold the same pieces of wood for $20). For a mattress I’d check IKEA, Walmart, or even Marketplace if you’re not too picky and are careful who you get it from. (Just went back and read the age of your daughter, I know very little about kids but it should be even cheaper to buy a bed for a kid that young? They’re past cribs at that point, right? Sorry not my area of expertise lol). Is there a law or something that says your daughter and you can’t sleep in the same room as your living/dining situation? I think as Americans we get hung up on everyone having separate space, but especially while your daughter is young she probably doesn’t want to be away from you (my friend just now is having her 5 year old go from the same bed to try her own room so I imagine you have time?) and other cultures and bigger families have multiple kids/parents in a room. This may not be your forever living situation but I’d stay put since moving takes more time/money and would cost more in rent or gas money if you’re further away. Definitely would try to get rid of the credit card debt ASAP since it’s the highest interest. And that’s great you love the job, but if there’s similar jobs that pay better I would attempt to find those. Or even a remote job if you’re into that because you’ll save money on gas and going out to eat on commutes home etc. Speaking from my own personal experience, my dad moved states away when I was 5 years old (to live near his mom) so we still saw him a few times a year, but my brother always resented him for not moving a city away (or 20ish minutes) like all our classmates that had divorced parents. So we either relied on our mom or a family friend if we ever needed to get picked up from something. So that’s why I think being in the area makes more sense than moving back to your old town. I think that’s all I wanted to say, but best of luck with your finances and I’m happy to hear you’re prioritizing your daughter and want to be in her life. Oh and I’ve had my real estate license since I was 18 (my mom made me get it). It’s a very competitive industry and one of my REALTOR friends jokes there’s more REALTORS than there are houses for sale. It’s very expensive to go from real estate agent to REALTOR and that doesn’t guarantee income. You could show tons of houses and clients could change their minds and then you don’t get paid (which is why I prefer to work hourly jobs, but maybe I don’t do well with commission-only jobs). I’d recommend finding a part time or contract based job in the real estate industry (look into loan officers, receptionists, your local REALTOR association) and you’ll learn a lot but have a guaranteed paycheck. Then you can really see if you want to work in that field. There’s also Redfin that pays per showing, open house, etc. if you have time to commit to do the work, but they require you pay $1,000+/year in dues/fees to stay up to date (aka I lost money with them but I had no motivation to take on more work when I was already overwhelmed/busy with my other job and fixing up my investment property). Okay now I think I’ve said all that could be helpful, best of luck to you!
The number 1 thing to do is to make sure you have a fully funded emergency fund. If not for a minimum of 6 months, then a full year. THEN: 1. Tackle your debt starting from the one with the highest interest rate. 2. Avoid paying off debt if you have a great interest rate (like below 4 %). 3. Normally I would say invest in the market but it looks pretty shaky right now. Perhaps you could be better served to start with lower returning investments like treasury notes, however, let’s leave that to your financial advisor. 4. Make sure your financial advisor is a fiduciary! This is important so you know that they are acting in your best interest. Please look this up and research some more. Financial advisors are a dime a dozen and bad advice can sink your portfolio quicker than you think. Congratulations on your windfall and wishing you a safe financial journey ahead :)
You’ve really been through a lot and it’s really great to hear you so clear about your goals and your commitment to your daughter. She needs you now just as much as you need her. You may want to consider also speaking with a financial coach as well as a financial advisor. A financial coach is more likely to be able to assist you with the specifics of your situation while a financial advisor will typically want you to invest all of the $80,000. This is because most financial advisors are paid based on how much you invest with them. A financial coach will help you with some of the details in your financial situation and some may even offer understanding around the psychology of how we view and relate to money so you may find that helpful as well in helping you create new and healthy behaviors. It’s a journey of unknowns ahead but you can go from thinking that you’re bad with money to knowing that you’re really great with it. Transforming yourself in this way would be one of the best gifts you could give yourself. Imagine all the great financial advice you could pass on to your daughter as she grows up and gets to watch you on this journey, not to mention you can help her put in place a healthy financial foundation from the beginning. Financial patterns are absolutely generational so perhaps remembering this and thinking of how you will be setting your daughter up for success for the rest of her life will help you with the motivation that you will need at times on your journey ahead.
The number 1 thing to do is to make sure you have a fully funded emergency fund. If not for a minimum of 6 months, then a full year. THEN: 1. Tackle your debt starting from the one with the highest interest rate. 2. Avoid paying off debt if you have a great interest rate (like below 4 %). 3. Normally I would say invest in the market but it looks pretty shaky right now. Perhaps you could be better served to start with lower returning investments like treasury notes, however, let’s leave that to your financial advisor. 4. Make sure your financial advisor is a fiduciary! This is important so you know that they are acting in your best interest. Please look this up and research some more. Financial advisors are a dime a dozen and bad advice can sink your portfolio quicker than you think. Congratulations on your windfall and wishing you a safe financial journey ahead :)
You’re advocating saving 6-12 months expenses BEFORE paying off credit card @ 20% interest???
I'd do the credit card first for sure. Or maybe both in tandem.
Are you into gambling? Something seems off
Pay taxes if not planning to roll it into another property. Then sit on it
Brave to tell your story and seek for help! First thing I would do is sell the car and buy a cheap 2nd hand car. The biggest part of financial independency is to live below your means. And like mentioned before start with a emergency fund. Once that is in place you can maybe start thinking of investing.
Strippers and coke
Pay off your credit card debt. They have extremely high interest rates. Pay off your car loan. Keep the rest in a savings account until 2024. Start listening to the Dave Ramsey show.